Qwikster was the short lived video by mail section of Netflix. After losing an estimated 1 million customers and plumiting stock prices, Netflix has decided to reverse its plan to divide its video-by-mail and video streaming services.

The class discussion whether it was a good or bad decision to divide Netflix and charge for both services, can now be concluded as bad.

Netflix had successfully positioned itself as number one in consumer minds, created a strong comparative advantage, and connotation around it’s brand name. Netflix was a consumer favourite because of its low cost and easy to use format. It’s comparative advantage lay in Netflix’s positioning in an unoccupied niche, which provided a wide range of videos through two methods of delivery. Netflix’s brand name is distinctive and up until its blunder, a consumer favourite. This new section of the original Netflix required two accounts and charged consumers more. Qwikster was seen as a betrayal and could alter the brands positioning in consumer minds.

Shares of Netfilx rose 10% after the news of its reversal plan, however, they once again turned down. With the decision to kill Qwikster, only time can tell if Netflix can regain its momentum and consumer trust.

Citation:

Burrus, Logan. Goldman, David. CNN Money Tech. October 10,2011. October 10,2011. <http://money.cnn.com/2011/10/10/technology/netflix_qwikster/?iid=SF_T_LN>

Pictures:

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http://www.google.com/imgres?q=qwikster&um=1&hl=en&client=firefox-a&hs=Va4&sa=N&rls=org.mozilla:en-GB:official&biw=1366&bih=575&tbm=isch&tbnid=o5QcqCXxhG0foM:&imgrefurl=http://bigshinyrobot.com/&docid=5v_Oy4sS3_592M&w=660&h=371&ei=jqaUTt_pOMeuiQKs18SpBQ&zoom=1&iact=rc&dur=355&page=1&tbnh=87&tbnw=155&start=0&ndsp=21&ved=1t:429,r:5,s:0&tx=37&ty=34